Amid COVID Government announces various reliefs measures for taxpayers, bank customers, firms and small business
The dues dates for various returns like income tax, TDS filings, investments deadlines under various schemes are approaching.
Firstly, small entrepreneurs, businesses and proprietorships such other enterprises are taking a hit on the businesses and on top of that there is confusion as to the sustainability and going concern of these businesses and on top of there is a treat of missed timelines and consequent penalties and financial burden.
Amid all this there is some good news! Government has come up with some relief measures and they are been communicated yesterday, i.e 25 March 2020, via a press release by Honorable Finance Minister Nirmala Sitharaman. So, lets have understand some of these right away.
Tax filings announcements
General blanket extension by 30 June for procedural documents filings
Due dates for issue of notice, intimation, notification, passing of approval order, sanction order, filing of appeals, furnishing of returns, applications & reports or any other document & compliance by tax payers have been extended to June 30, 2020.
Investments for capital gains roll over- by 30 June
All investments for roll over benefits of capital gains under Income tax act, wealth tax act, prohibition of benami property act, black money act, securities transaction tax law, equalization levy law– now has been increased to 30 June
Tax returns for FY 2018-19
Tax returns for FY 2018-19 can be filed by June 30
Interest on delayed deposit of TDS- 9% only
No extension for interest on delayed deposit of TDS. However, the interest has been halved to 9% from current 18%.
Adhaar PAN linking – by 30 June
The deadline for linking Aadhaar with PAN has been extended to 30 June 2020
Vivaad se vishwas scheme
Vivaad se vishwas scheme which is the amnesty scheme for tax disputes where the time was expiring on march 2020 has been extended to 30 June with no additional interest of 10% till 30 June.
GST return filings dates extended by 30 June
The last date for filing GST returns for the month March, April, May 2020, including composition scheme, extended to 30 June
Companies with turnover of less than 5 crore, no late fees or penalty or interest will be levied
Companies with turnover above 5 crore interest applicable is @ 9%
For companies with turnover above 5 crores, there will be no late fees, penalties but there will be interest which is reduced to 9% from current 18%
Board meetings relaxed for 2 quarter
MCA-21 Registry: moratorium has been issued from April 1 to sept 30, 2020. Thus, there will be no additional fees for late filings. The mandatory requirement for holding meeting of board directors relaxed by 60 days. This relaxation is applicable for 2 quarters.
Currently companies are required to hold a minimum number of 4 meetings every year in such a manner that is a gap of not more than 120 days between any 2 consecutive meetings of the Board.
So now the relaxation has been given and now board meeting can be held with a gap of 6 months between 2 consecutive meetings as opposed to 4 months or 120 days earlier. And this can be enjoyed for 2 quarters.
Independent directors’ violation
Under Section 149(3) of the new Companies Act, every company is required to have at least one director who has stayed in India for a total period of nor less than 182 days in the previous calendar year. A violation of this rule will be condoned in the wake of the current coronavirus crisis.
Thus, for FY 2020, independent directors will not be held for violation if they have not attended even single board meeting.
Relaxation in period of stay by a director also provided
Other Corporate laws regulatory & compliance related
CARO 2020 – deferred by 1 year
Applicability of CARO 2020, has been shifted to FY20-21. Earlier it was supposed to be in force for FY ending march 2020 now its delayed by one year.
The need to create reserve for 20% of all deposits maturing next financial year by April, this has been deferred to June.
The need to invest 15% of the amount from maturing debentures during the next financial year (20-21) by April this has been deferred to June.
Insolvency & bankruptcy
Default threshold increased to 1 cr
May suspend section 7,9 &10 for 6 months
Threshold for default under insolvency law and bankruptcy code has been increased to 1 crore from present 1 lakh. This a major step given the slowdown and economic crisis that country is facing and it’s a welcome step. This is effective immediately to stop the triggering of insolvency proceedings against micro, small and medium enterprises.
Government has also specified that if the situation does not improve by 30 April, it may consider suspending section 7,9, and 10 of bankruptcy law for a period of 6 months.
What are these sections?
Section 7: Initiation of corporate insolvency resolution process by financial creditor
Section 9- Application for initiation of corporate insolvency resolution process by operational creditor.
Section 10- Initiation of corporate insolvency resolution process by corporate applicant.
Delaying the applicability of these sections by which insolvency proceedings can be launched, will in turn mean delay in initiation of the insolvency proceedings and thereby give more time for businesses to revive on their own.
Measures for startups
Commencement of business can be filed within 12 months’ time
For newly incorporated companies, there is a requirement to file the declaration for commencement of business within six months so another six months are given for this purpose.
Commerce and trade
Withdrawals at any ATM
No fees for not having minimum balance in savings account
Debit card holders can withdraw cash from any bank ATMs for the next three months. No fee will be charged for not having minimum balance in the saving account. Bank charges will be reduced for digital transactions for trade & finance consumers. The principle to be followed by Commerce Department: For procedural and eligibility point of view, extension of timeline will be given but there won’t be an extension of scheme guidelines for modification. We, both government and the regulator SEBI, are monitoring the stock market thrice a day. Various sub-groups of the task force on economy, as well outsiders, have made suggestions and they will come back with announcement. Department of financial services will decide if there are to be any changes on equal monthly installments for borrowers.
Import export related reliefs
- All sanitary import permits (shrimp, brood stock, and any aquaculture) set to expire by April 1 and April 15 2020, are being extended by three months.
- re-booking for quarantine cubicles, for those cancelled consignments in aquatic quarantine facilities, will not entail additional booking charge.
- The grant of no objection certificate and verification of documents for quarantine will be relaxed from 7 days to 3 days.
Customs & other clearances
- Customs clearance will be open 24X7, doing its duty for essential services items.